<p>No idea whatsoever…</p>
<p>Does this mean they’re more likely to reject students who need a lot of need-based aid? Same goes for all the colleges on that list, many of which claim to be “need-blind.” Wow, I was not aware that so many elite universities are in so much debt. How do they plan on funding students (like me) with EFCs of 0? (Sorry, I have no concern for these universities and their debts other than how they affect us, the students.)</p>
<p>Because it has been on an incredible building binge for the past decade, and has not mounted a major capital fundraising campaign in forever. There is no question, none, that a really significant capital campaign will happen before the current president retires, and he has been in office for almost eight years (I think), so the capital campaign is likely to start in about five minutes. (Metaphorically. But I will be really surprised if the kickoff doesn’t happen this year.)</p>
<p>Part of the reason there hasn’t been a capital campaign is that the University is putting a ton of effort into improving its relationship with alumni, something that historically was a significant weakness. I think the administration’s calculation (successive administrations’ calculations) has been that in the long run the fundraising (and the University) will be better off if they do the work first to improve its status, its public profile, and its alumni relations, and then hit everyone up for money. The first part has been a stunning success; the second part was probably delayed by the Great Recession, but can’t be delayed much longer.</p>
<p>To play with the big boys, Chicago has to provide significant financial aid, and Chicago wants very much to play with the big boys. Of course, if there are big reversals – the endowment has terrible investment losses, the capital campaign does not work – then they will have to reexamine what is financially feasible. But for the moment I am sure their plan is to provide more financial aid to undergraduates going forward, not less.</p>
<p>I think much of this arises because UChicago is so strongly aspirational and (perhaps to a fault) aggresively ambitious. During the great recession, while development at other colleges slowed (Yale, for example, is still waiting to complete new residence halls), UChicago kept moving forward - building new dorms, new admin offices, hiring more faculty, etc. I think they saw the stalling by some peers as a chance to make up ground.</p>
<p>Also, while other colleges may be generally aware of peers, UChicago, at least administratively, seems much more aware of what the very biggest fishes in the pond are doing. I know two institutions very well - UChicago and UPenn - and I’ve spoken to many UChicago administrators (both as part of their job duties and outside of them), and they often point to what Harvard or Stanford are doing, to an extent greater to what I saw at Penn. (At Penn, I think Wharton and the medical school track the biggest fishes more closely but, besides that, there’s less awareness.) I’ve had friends apply for various positions at UChicago, and there is a lot of talk and belief in the absolute preeminence of the institution.</p>
<p>Unfortunately, UChicago’s base is much, much more fragile than what you see at Yale or Harvard. Chicago is, in essence, trying to rally alumni, build broad cultural recognition, establish a firmer footprint in its homebase (the city of Chicago and Hyde Park), and establish offerings (like a segment of engineering) that many of its peers have offered for decades. It takes many decades to build up on all fronts, and UChicago’s really focused on this in the past 7-10 years. Such development takes a lot of money, and the school has chosen debt because (I imagine) it wanted the finances quickly, and can’t match the capital campaigns of its tippy top peers. In fact, it’s last capital campaign, which was ages ago, was a very drawn out, not terribly successful process. </p>
<p>I imagine, as JHS said, that the new capital will start very soon (it must!), and that the amount sought will be considerable (in the $4-$5B range). I also imagine, however, that UChicago will struggle to raise this amount. It’s past track record for fundraising hasn’t been in line with the school’s goals, it has a smaller and less affluent alumni base than many of the tippy top schools, and older alums don’t tend to have the same “rah rah” spirit about the school that you’d see at Princeton or Yale. </p>
<p>In short, the ambitions of UChicago’s leadership may force the school into a risky position - a place where it’s bitten off more than it can chew. </p>
<p>I believe the administration may be able to pull it off with all these bold moves. For one thing, the long term low interest rate environment is working for them. If you want to be in the big game and play with the big boys, you need to ante up. The admin people are smart enough to double down when no one has the stomach for it during the great recession. I say, more power to them.</p>
<p>I disagree less with Cue7 than the comparative tones of our posts indicate.</p>
<p>Nevertheless, I would point out that Chicago has had excellent investment performance with its endowment: 6.6% in FY 2013, averaging 10%/year over the previous decade (which of course included three absolutely horrendous years), doubling even after contributing substantially to the University’s operating budget. Meanwhile, in FY 2013, on average outstanding debt of about $3.6 billion, the University incurred interest expense of either $100 million or $28 million (depending on whether you offset interest expense by interest derivative gains), for an effective interest rate of 2.8%-0.8%. That’s a pretty nice spread, especially if your base is measured in billions. I am sure that a good deal of the increased debt was effectively incurred to carry investments rather than liquidate them to meet capital needs, and so far that has been a good decision.</p>
<p>Really, what else would you expect the University of Chicago to do but to follow the market’s signals, and the market has been saying “Borrow, borrow, borrow!” As long as they don’t have to keep borrowing after they have trashed their credit rating, and they can raise enough to de-leverage from contributions and/or selling investments, things will be fine.</p>
<p>Well, I’m international. My classmate whose EFC was 50% got in, but I was waitlisted even if I was more than willing to pay full freight (in fact, I would gladly pay double to attend UChicago). We have similar academics, he has weaker ECs…so…yeah I don’t think it’s that ‘heavily leveraged’.</p>
<p>nope. I don’t need financial aid. My dad can build a library there but I am still waitlisted. Maybe I am ORM.</p>
<p>Fundraising campaign will probably be announced later this year. The silent phase has already started from what ive heard.</p>
<p>JHS actually describes an economic environment (cheap debt, good investment performance) that applies to all the top schools (UChicago’s endowment performance wasn’t that much better than any of its peers). Yet, UChicago was really the only school that spent so heavily during the great recession. Many schools stalled or delayed development plans. </p>
<p>Now, as JHS also mentioned, fundraising will become key over the next 5-7 years. I’m not overly optimistic about UChicago’s fundraising prowess, if past history is any guide. It’s last campaign was slated to run for five years and raise $2B: <a href=“U. of C. raises $2.8 billion, ends campaign”>U. of C. raises $2.8 billion, ends campaign; . In practice, the campaign went for nine (!) years, and raised $2.38B. This past track record doesn’t inspire confidence. </p>
<p>Currently, a few schools have either finished or are in the midst of capital campaigns (none of which lasted or will last nearly a decade), and here are some results:</p>
<p>Stanford raised $6.2 billion in five (five!) years: <a href=“Stanford Raises $6.2-Billion, a Record for Higher Education”>http://chronicle.com/article/Stanford-Raises-62-Billion/130698/</a></p>
<p>Columbia $6.1 billion in eight years: <a href=“http://www.columbiaspectator.com/news/2014/01/30/columbia-sets-ivy-record-raises-over-61-billion-capital-campaign”>http://www.columbiaspectator.com/news/2014/01/30/columbia-sets-ivy-record-raises-over-61-billion-capital-campaign</a></p>
<p>USC is in the middle of a $6 billion campaign (quite ambitious)</p>
<p>Harvard is in the middle of a $6.5 billion campaign</p>
<p>Duke has flagging performance for a modest $3.25 billion campaign (<a href=“http://www.dukechronicle.com/articles/2013/04/02/most-schools-make-progress-toward-duke-forward-goals”>http://www.dukechronicle.com/articles/2013/04/02/most-schools-make-progress-toward-duke-forward-goals</a>)</p>
<p>Northwestern just announced a $3.75 billion campaign (<a href=“Northwestern Announces $3.75 Billion Campaign - Northwestern Now”>Northwestern Announces $3.75 Billion Campaign - Northwestern Now)</p>
<p>The pressure is really on UChicago now. Given it’s level of debt, and the goals of the administration, a $4-$5B goal would be advisable, but could the university achieve this? It’s peers are raking in gobs of money (Stanford at $6B+, Columbia at $6B, Harvard will probably end it’s campaign in the $7B+ range, even Penn went past their $3.5B goal and ended up with $4.3B recently), and UChicago’s fundraising, hasn’t been great. It raised about $400M last year, which was a stupendous year for the school, and amounts to maybe 4 months of fundraising at Stanford. </p>
<p>The current fundraising environment seems to highlight the disparity between the haves (UChicago, Duke, Penn, Northwestern), and the have-a-lots (Stanford, Harvard, etc.). UChicago wants desperately to be included in the have-a-lots, but is the infrastructure and tradition really there to support such a reach? I’m concerned that UChicago’s fundraising may fall below the level of NU and Penn, and if the school spends the next 6 years to raise, say, $3.5 billion, they’ll be well behind their peers by 2020, and still more highly leveraged than all of them. </p>
<p>I would be surprised if Chicago’s fundraising didn’t fall below the level of Northwestern and Penn, given the relative sizes of the alumni bases and historical patterns. We’ll see what goal they set themselves, but I wouldn’t think that $3B was “modest” at all, not if it got raised relatively quickly. You are right that ultimately if they want to be a peer of Harvard and Stanford they have to raise a lot more money, but they don’t have to do it all this decade.</p>
<p>This is a long term investment for UChicago. In terms of academic, UChicago is always a peer of Harvard and Stanford since day one. In fact, Chicago is a model in higher education Harvard and Stanford want to emulate, but I digress; it is the endowment space where they are behind for which there is a lot of room to make up. </p>
<p>JHS said: “I would be surprised if Chicago’s fundraising didn’t fall below the level of Northwestern and Penn”</p>
<p>This is ultimately the issue. UChicago fancies itself amongst the “have-a-lots,” but while it’s academic rep is high, it’s fundraising falls well below expectations. In many fields where tradition matters and departments aren’t as dependent on big-time funding (e.g. humanities fields, econ, law, etc.) the school can hold its own. In other areas more dependent on big-time funding (medicine, STEM research), the school may be losing ground. </p>
<p>If Chicago’s fundraising falls below the level of NU and Penn (a fact that, I agree, could very well occur), how can it fancy itself as a member of the very tippy top? Money is the lifeblood of an institution, and the less UChicago raises, the more it drives itself into a niche (as a school known for critical thinking and preeminent in some disciplines, but with a generally smaller research footprint than many of its peers). </p>
<p>I concur “Money is the lifeblood of an institution”.</p>
<p>But how much is good enough? Say, after a threshold the extra money a school has may not be proportional to what it will achieve.</p>
<p>E.g., MIT only has 11B (lol) which is far less than that of Harvard, Princeton, and Yale. But MIT has arguably one of the best STEM programs in the nation.</p>
<p><a href=“MIT releases endowment figures for 2013 | MIT News | Massachusetts Institute of Technology”>http://web.mit.edu/newsoffice/2013/institute-endowment-figures-0913.html</a></p>
<p>Chicago is not on the threshold yet IMO. It may not catch up Harvard’s endowment in a very long time if not ever. It may not catch up MIT’s grants either.</p>
<p>But I think it can still achieve a lot even in the areas where a lot of money is needed. Some innovations are needed and some wise decisions are needed. Fundraising is one way, there must be other ways.</p>
<p>Eddi137,</p>
<p>MIT is not a good comparator for UChicago - MIT is primarily a technical institute. It doesn’t have a law school, medical school, associated hospital system, broad liberal arts curriculum, etc. </p>
<p>So, when you ask how much is good enough, the answer is, no single amount is good enough. Schools always want more. A better question is, amongst similarly situated peers (e.g. broad research universities), what’s a good target?</p>
<p>The current climate indicates that anything from $4.5-6B is probably in the right ballpark. That’s what Harvard, Columbia, Stanford, etc. are doing. In terms of past practice, though, UChicago’s actual fundraising clout is probably closer to Vanderbilt or Emory than it is to Harvard and Stanford. This makes keeping the educational mission of the school (excellence as a research university) difficult. Add in the highly leveraged current status of the school, and it’s a problematic situation. </p>
<p>alicejohnson = Duke inferiority complex</p>
<p>Cue7,</p>
<p>I cited MIT because you mentioned that STEM programs needed a lot of money. MIT is not as rich as Harvard (on the paper) but it is as good as Harvard in the natural sciences and may be better in the engineering.</p>
<p>I think we are on the same page that Chicago needs more money (a lot of) to catch up or to advance its goal to be a major research university in the world on many fronts. As you have mentioned past Chicago fundraising practices were not very successful (I am not familiar with them) so I am thinking there may be other ways to achieve its long term goal if the fundraising is not as successful as expected.</p>
<p>E.g., Chicago is managing two national labs which are doing research on basic sciences, materials, energy, computing (5th fastest computer on the planet last year I heard), etc. I do not know how the labs work with researchers. Since Chicago has some unique advantages there and may exploit them. Is it possible for Chicago’s faculty and students to do research there (more frequently if already)? </p>
<p>Or it gets more grants like this</p>
<p><a href=“University of Chicago to share in $540 million gift from Ludwig Cancer Research | University of Chicago News”>http://news.uchicago.edu/article/2014/01/06/university-chicago-share-540-million-gift-ludwig-cancer-research</a></p>
<p>Guys, Chicago will be fine. Oxford has a smaller endowment. </p>
<p>To alicejohnson:</p>
<p>I didn’t mean any disrespect re the Duke campaign. The duke chronicle article itself that I linked to described the campaign in fairly tepid terms. Looking across the spectrum of top schools, the $3.25B goal is on the smaller side, and the performance thus far hasn’t exactly been going gangbusters. Make no mistake, UChicagos campaign may very well go in a similar or even less positive direction. </p>
<p>Right now, actually, Duke and UChicago appear to be highly leveraged and without the same verve in fundraising as harvard, stanford, etc. </p>
<p>All endowments aren’t created equal. Hospitals are a huge endowment suck. Yale, Duke, and Chicago have one, Penn has more than one; Harvard, Princeton, and MIT don’t have one. So are business schools, which tend to attract more donations than they can possibly spend. (More points for Princeton, which doesn’t have a business school.)</p>
<p>All of these universities are incredibly wealthy institutions, of a sort the world has never seen before, except for actual countries, and the Catholic Church. When I was in college, Yale’s endowment was less than 5% of what it is today. Hand-wringing about whether an endowment of $6 billion or $7 billion is enough, and how fast it should take you to raise more than $3 billion, is kind of the epitome of a first-world problem.</p>
<p>@alicejohnson: Robert Zimmer has been a faculty member at Chicago since 1977, leaving only for four years as Provost at Brown. John Boyer, the Dean of the College, has been at Chicago continuously for over 45 years, since starting graduate school there in 1968. He has been Dean for over 20 years, serving under four rather different Presidents (and reappointed by three of them – you have no idea how extraordinary that is). They know more about the core values of the University than you do, and are better qualified to be stewards of them.</p>